Kaushal Atodaria
Pranav Srivilasan
Is public charging a sustainable business? For years, that was one of the big EV questions. In many markets, it still is.
Fundamentally, charging stations are fixed assets with significant upfront capital expenditure. The key goal financially is to sweat the asset as much as possible, and there will be a threshold of usage below which it isn’t viable.
i.e., you need as many customers using it as possible to justify the cost of the charger.
In India specifically, headlines like “EV owners aren't using public charging points much” are still flying around, talking about poor charger utilisation being a challenge for public charging networks.
So, how do you measure utilisation?
There are a bunch of metrics, but the most common one cited today is time spent charging a vehicle as a percentage of the day. For example, if a charger is plugged into a vehicle and active for 2 hours in a day, that’s about 8.3% utilisation.
A lot of car-focused charging networks in India will be at sub-5% utilisation by time (networks targeting commercial vehicles usually do better). The threshold for a viable network is usually seen as ~15% average utilisation (estimates vary).
But we think that’s entirely the wrong way to measure utilisation.
The metric to assess a charging network’s performance is by how much energy it sells per charger per day, not by time spent in use. Comparing two chargers in terms of time utilised only makes sense if they’re identical chargers. But a charger that sells more energy in a day - especially if it spends less time occupied - is better.
Networks sell energy, not time.
In fact, the ultimate metric while deciding to invest in building out a charging network would be units of energy sold per dollar of capex. This is where rapid charging comes into the picture and completely changes the economics of a network.
Sell more with less
Quick reminder: The way our rapid charging tech works is that we monitor every cell in the pack and dynamically adjust our charging algorithms. That enables us to charge the pack at peak power for almost the entire charging cycle, i.e. we can use the full output of our charger always. With a regular charger and battery, you can only use the peak power output from, say, 10% to 40%.
The end result is that rapid charging enables much higher utilisation from a similar asset.
We’ve talked before about how faster charging is cheaper charging for the end user. Because a rapid-charging network can sell so much more energy in the same amount of time, it can price the energy lower for the customer. For the network, it means better economics.
Making the math work
Today, on average, we at Exponent sell about 200 kWh of energy per day per charger. For reference, Tesla’s Supercharger network globally averages about 250-300 kWh per day per charger.
But we do that with 40 kW chargers that cost a fraction of Tesla’s 150-300 kW chargers.
It’s not entirely an apples-to-apples comparison since Tesla is serving personal cars and our customers are commercial vehicles (both fleets and individual drivers), but the principle holds true even for a rapid-charging car network.
Coming to a more direct comparison, we can look at how our rapid-charging stations stack up against a regular “fast” charger for three-wheelers in India.
EXPONENT
RAPID CHARGER
REGULAR
"FAST" CHARGER
Annual energy sold
Capex + 10Y rent
Annual units sold
per capex ($)
While the upfront capex is a little higher - including the charger, installation, labour, etc. - energy sales can easily be 5-6x. We’ve included the cost of 10 years’ worth of rent as well, since real estate is a big fixed cost for a charge point operator. (For the financially inclined, yes, we should discount that to a net present value instead of multiplying annual rent by 10, but we wanted to keep the example simple.)
Establishing a sustainable business in public charging is absolutely vital if we want to make a mass shift to EVs possible. Rapid charging unlocks that opportunity, by letting the network sell energy much faster - but also allowing each station to serve a much larger number of vehicles.
That also means coordinating a fleet of customers and managing queueing in real time - to actually sell them energy - but we’ll talk more about that another day.